By Dominic Chopping

Norway's Statoil ASA (STO) on Tuesday submitted its plan for the development and operation of the Johan Castberg project in the Barents Sea, a 49 billion Norwegian kroner ($5.9 billion) project that is thought to hold recoverable resources of between 450 million and 650 million barrels of oil equivalent.

"The project is [a] central part of the further development of the northern regions, and will create substantial value and spinoffs for Norway for 30 years," said Margareth Ovrum, Statoil's executive vice president for technology, projects and drilling.

First oil from the field is expected in 2022.

The project hadn't previously been commercially viable due to high capital expenditure of more than NOK100 billion and a break-even oil price of more than $80 a barrel. However, Statoil said it has worked with suppliers and partners, changed the concept and found new solutions, halving capital expenditure and making the project profitable at oil prices of less than $35 per barrel.

As part of the plan submitted today, Statoil, along with its partners in the field--Eni SpA (E) and Petoro--have awarded a NOK4 billion contract to Aker Solutions ASA (AKSO.OS) for subsea systems, engineering and procurement management.

Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

December 05, 2017 02:44 ET (07:44 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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